The push for more sustainable energy has been rapid over recent years, and the automotive market has faced its fair share of criticism. As a result, the electric vehicle (EV) market has made tremendous leaps forward. Individuals are seeing incredible growth in the number of EVs worldwide and on the roads. And this may only be just the beginning as customers continue the EV transition. The growth in this market has also presented buying opportunities for many EV penny stocks that may be set for tremendous growth in the future. Here is Benzinga’s list of the best EV penny stocks for your portfolio.

• Ideanomics, Inc.
• Kandi Technologies Group, Inc.
• Volta, Inc.
• Xos, Inc.
• CBAK Energy Technology, Inc.

The transition to EVs will take some time, but the growth of this market should not be underestimated. No market is guaranteed to be profitable, but the EV industry looks poised for growth given macro tailwinds. Here are some stock ideas.  

Ideanomics: Ideanomics is a global company that facilitates the adoption of commercial EVs and supports next-generation financial services and fintech products.

Its EV division, Mobile Energy Global (MEG), provides group purchasing discounts on commercial EVs, EV batteries, financing and charging solutions. 

The company recently acquired a 70% stake in Energica Motor Company, an Italian manufacturer of high-performance electric motorcycles. Meanwhile, the company has previously acquired VIA Motors, Solectrac, Treeletrik, Wave and U.S. Hybrid.

Elsewhere, the company reported revenue for 2021 of $114.1 million. Revenue from the U.S. in 2021 jumped to $84.3 million versus $1.6 million in 2020. 

Kandi Technologies: Kandi Technologies Group is engaged in the development, production and distribution of EV products, EV parts and off-road vehicle products, primarily in the Chinese market.

In December 2021, Kandi announced its wholly-owned subsidiary Jiangxi Province Huiyi New Energy would be in charge of mass production of the company’s advanced lithium iron phosphate battery, one of the more advanced batteries in the market.

The company reported total revenue of $91.5 million, compared to $76.9 million in 2020. In addition, gross profit grew 20.5% year-over-year to $16.2 million.

Volta: Volta is engaged in the industry of commerce-centric EV charging networks. It builds EV charging networks that capitalize on and catalyze the shift from combustion-powered miles to electric miles by placing stations where consumers are active.

In its full-year earnings for 2021, Volta reported total revenue increased 66% year-over-year to $32.3 million. Elsewhere, the company has attempted to save costs by slashing its workforce by 18% since June. 

Furthermore, Volta recently partnered with Tucson Electric Power to improve EV charging infrastructure. 

Xos: Xos is an electric mobility company. It designs and develops fully electric battery mobility systems specifically for commercial fleets. The company’s primary focus is on medium- and heavy-duty commercial vehicles that travel on last-mile routes.

The company posted full-year revenue of $5 million in 2021, up from $2.6 million in 2020. The group has expanded through a strategic partnership with NationaLease.

The partnership will hope to expand Xos’ footprint across North America. 

CBAK Energy Technologies: CBAK Energy Technology is engaged in the manufacture, commercialization and distribution of a variety of standard and customized lithium-ion high-power rechargeable batteries, which are mainly used in EVs and light EVs.

In 2021, the business reported excellent performance, with full-year net revenues increasing by 40% to $52.7 million. Additionally, gross profit increased 88% from the previous year to $5.1 million.

A penny stock is a small company that trades for less than $5 per share. Investors can find some penny stocks on large exchanges such as the New York Stock Exchange or the Nasdaq. However, most penny stocks trade over the counter (OTC).

EV penny stocks are companies that trade for less than $5 in the EV market. And, as the market continues to grow on an upward trajectory, some of these penny stocks may come at an excellent price for investors.

Assessing the pros and cons of EV penny stocks is essential. Of course, each penny stock, whether in the electric vehicle industry or not, will need to be researched in-depth to decide if it is the right company to invest in, but here are some factors you should consider for the EV industry.

Growth in the industry: The development of the EV market has been immense, and it is a common occurrence that rising tides lift all ships. So, if the market continues on its current trajectory, EV companies will likely benefit, whether they are penny stocks or not.

Requires little starting capital: The low initial investment needed to buy penny stocks is one of the most significant advantages. As a result, many people are able to acquire shares in penny stocks and, if they are correct in their assessment of the company, realize a healthy profit.

More opportunity: Government assistance and the expanding EV industry are increasing the opportunities available to EV firms. Many EV penny stock companies are aiming for substantial growth and are currently in the beginning phases of their life cycles. Thus, many investors can get in early on some potential future EV winners.

Despite the potential positives, penny stocks come with significant drawbacks, and investors must face the risks of a potentially volatile market.

Volatility: Trading or investing in penny stocks is known to be more volatile, and investing in penny stocks in a growth market such as EV comes with increased risk, especially when an economic downturn occurs. Therefore, this must be considered before investing in EV penny stocks.

Higher probability of loss: Because of their inherent risk, penny stocks frequently exhibit risky behavior to get a foothold in the market. As a result, many penny stocks can make considerable losses and even fail as a company.

Little history: Only recently have changes been seen in the EV sector. Numerous risks might arise if you add this to a lack of knowledge in general of penny stocks. Many penny stocks are young companies or may soon file for bankruptcy. The potential of an EV stock may be difficult to evaluate as a result.

Liquidity: Liquidity issues for equities can lead to several issues. And with penny stocks, liquidity can vary significantly. Investors will struggle to sell the stock during times of low liquidity. In addition, it is easier for investors to manipulate a stock’s price, leaving a trader at risk.

If you wish to invest in EV penny stocks and have assessed the risks and benefits of the industry, then it is essential to find a broker which best suits you. You can choose from many brokers.

Listed below are some of the best penny stock brokers you may want to look into.